Exhibit 10.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is entered
into as of this 20 th
day of July, 2006 by and among
Graphic Packaging International, Inc., a Delaware corporation
(“Employer”), Graphic Packaging Corporation, a Delaware
corporation (“GPC”) and Michael P. Doss
(“Executive”).
W I T N E S S E T H :
WHEREAS, Employer desires to employ
Executive on the terms and conditions set forth herein;
WHEREAS, Executive desires to accept
such employment on the terms and conditions set forth
herein;
WHEREAS, each of Employer, GPC and
Executive agrees that Executive will have a prominent role in
the management of the business, and the development of the
goodwill, of Employer and its Affiliates (as defined below) and
will establish and develop relations and contacts with the
principal customers and suppliers of Employer and its Affiliates in
the United States and the rest of the world, all of which
constitute valuable goodwill of, and could be used by Executive to
compete unfairly with, Employer and its Affiliates;
WHEREAS, ( i ) in the
course of his/her employment with Employer, Executive will obtain
confidential and proprietary information and trade secrets
concerning the business and operations of Employer and its
Affiliates in the United States and the rest of the world that
could be used to compete unfairly with Employer and its Affiliates;
( ii ) the covenants and restrictions contained in
Sections 8 through 13, inclusive, are intended to protect
the legitimate interests of Employer and its Affiliates in their
respective goodwill, trade secrets and other confidential and
proprietary information; and ( iii ) Executive desires
to be bound by such covenants and restrictions;
NOW, THEREFORE, in consideration of
the premises and the mutual covenants and promises contained herein
and for other good and valuable consideration, Employer, GPC and
Executive hereby agree as follows:
1. Agreement to Employ
. Upon the terms and subject to the conditions of this
Agreement, Employer hereby employs Executive, and Executive hereby
accepts employment by Employer.
2. Term; Position and
Responsibilities .
(a) Term of Employment
. Unless Executive’s employment shall sooner terminate
pursuant to Section 7, Employer shall employ Executive for
a one year term commencing on the date hereof (the
“Initial Term”). Effective upon the expiration of the
Initial Term and of each Additional Term (as defined below),
Executive’s employment hereunder shall be deemed to be
automatically extended, upon the same terms and conditions, for an
additional period of one year (each, an “Additional
Term”), in each such case, commencing upon the
expiration of the Initial Term or the then current Additional Term,
as the case may be. The period during which
Executive is employed pursuant to
this Agreement, including any extension thereof in accordance with
the preceding sentence, shall be referred to as the
“Employment Period”.
(b) Position and
Responsibilities . During the Employment Period,
Executive shall serve as Vice President, Operations of Employer and
have such duties and responsibilities as are customarily assigned
to individuals serving in such position and such other duties
consistent with Executive’s title and position as the Board
of Directors of Employer (“Employer’s Board”)
specifies from time to time. Executive shall devote all of his/her
skill, knowledge and working time to the conscientious performance
of the duties and responsibilities of such position, except for (
i ) vacation time as set forth in Section 6(c) and
absence for sickness or similar disability and ( ii
) to the extent that it does not interfere with the
performance of Executive’s duties hereunder, ( A
) such reasonable time as may be devoted to service on boards
of directors of other corporations and entities, subject to the
provisions of Section 9, and the fulfillment of civic
responsibilities and ( B ) such reasonable time as may
be necessary from time to time for personal matters. If so
elected or designated by the respective shareholders thereof,
Executive shall serve as a member of the Boards of Directors
of GPC, Employer and their respective Affiliates during the
Employment Period without additional compensation.
(c) Promotion . Not
later than November 1, 2006, Executive’s position and
responsibilities set forth in Section 2(b) will change to Senior
Vice President, Consumer Products. On the day
Executive’s position changes, Executive’s base salary
set forth in Section 3 will change to $300,000.00 and
Executive’s annual target bonus opportunity for 2007 set
forth in Section 4 will change to 70%. Executive agrees that
this change in position will constitute a promotion for purposes of
Section 7(d)(v).
3. Base Salary .
As compensation for the services to be performed by Executive
during the Employment Period, Employer shall pay Executive
a base salary at an annualized rate of $240,000.00, payable in
installments on Employer’s regular payroll dates.
Employer’s Board shall review Executive’s base salary
annually during the Employment Period and, in its sole discretion,
Employer’s Board may increase (but may not decrease) such
base salary from time to time based upon the performance of
Executive, the financial condition of Employer, prevailing industry
salary levels and such other factors as Employer’s Board
shall consider relevant. (The annual base salary payable
to Executive under this Section 3, as the same may be
increased from time to time and without regard to any reduction
therefrom in accordance with the next sentence, shall hereinafter
be referred to as the “Base Salary”.) The Base
Salary payable under this Section 3 shall be reduced to the
extent that Executive elects to defer such Base Salary under the
terms of any deferred compensation, savings plan or other voluntary
deferral arrangement that may be maintained or established by
Employer.
4. Incentive Compensation
Arrangements . During the Employment Period, Executive
shall participate in Employer’s incentive compensation
programs for its senior executives existing from time to time, at
a level commensurate with his/her position and duties with
Employer and based on such performance targets as may be
established from time to time by Employer’s Board or
a committee thereof. For calendar year 2006,
Executive’s aggregate annual target bonus opportunity shall
be 50% of Base Salary.
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5. Employee Benefits
. During the Employment Period, employee benefits, including
life, medical, dental, accidental death and dismemberment, business
travel accident, prescription drug and disability insurance, shall
be provided to Executive in accordance with the programs of
Employer then available to its senior executives, as the same may
be amended and in effect from time to time. Executive shall
also be entitled to participate in all of Employer’s profit
sharing, pension, retirement, deferred compensation and savings
plans, as the same may be amended and in effect from time to time,
applicable to senior executives of Employer. The benefits
referred to in this Section 5 shall be provided to Executive
on a basis that is commensurate with Executive’s
position and duties with Employer hereunder and that is no less
favorable than that of similarly situated employees of
Employer.
6. Perquisites and
Expenses .
(a) General . During
the Employment Period, Executive shall be entitled to a perquisites
allowance in the amount of $20,000 on an annualized basis, to be
paid as soon as administratively practical after January 1 of each
year. This special bonus can be used by Executive for such matters
to include, without limitation, tax preparation services, financial
planning services, home security services, executive physical
examination, dues of airline, luncheon, country or athletic clubs,
or automobile expenses.
(b) Business Travel,
Lodging, etc. Employer shall reimburse Executive for
reasonable travel, lodging, meal and other reasonable expenses
incurred by him/her in connection with his/her performance of
services hereunder upon submission of evidence, satisfactory to
Employer, of the incurrence and purpose of each such expense and
otherwise in accordance with Employer’s business travel
reimbursement policy applicable to its senior executives as in
effect from time to time.
(c) Vacation .
During the Employment Period, Executive shall be entitled to five
weeks of paid vacation on an annualized basis, without carryover
accumulation.
7. Termination of
Employment .
(a) Termination Due to
Death or Disability . In the event that Executive’s
employment hereunder terminates due to death or is terminated by
Employer due to Executive’s Disability (as defined below), no
termination benefits shall be payable to or in respect of Executive
except as provided in Section 7(g). For purposes of this
Agreement, “Disability” shall mean a physical or
mental disability that prevents or would prevent the performance by
Executive of his/her duties hereunder for a continuous period
of six months or longer. The determination of
Executive’s Disability shall ( i ) be made by an
independent physician who is reasonably acceptable to Employer and
Executive (or his/her representative), ( ii ) be final
and binding on the parties hereto and ( iii ) be based
on such competent medical evidence as shall be presented to such
independent physician by Executive and/or Employer or by any
physician or group of physicians or other competent medical experts
employed by Executive and/or Employer to advise such independent
physician.
(b) Termination by Employer
for Cause . Executive may be terminated for cause by
Employer for ( i ) the willful failure of Executive
substantially to perform his/her duties hereunder
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(other than any such failure due to
Executive’s physical or mental illness) or other willful and
material breach by Executive of any of his/her obligations
hereunder, after a written demand for substantial performance
has been delivered, and a reasonable opportunity to cure has
been given, to Executive by Employer’s Board, which demand
identifies in reasonable detail the manner in which
Employer’s Board believes that Executive has not
substantially performed his/her duties or has breached his/her
obligations, ( ii ) Executive’s engaging in
willful and serious misconduct that has caused or is reasonably
expected to result in material injury to Employer or any of its
Affiliates, ( iii ) Executive’s conviction of, or
entering a plea of guilty or nolo contendere to,
a crime that constitutes a felony, or ( iv )
Executive’s material violation of the requirements of federal
or state securities law, rule or regulation, in cases
involving fraud or deceit, or violation of Employer’s insider
trading policy. Any item of conduct in the previous sentence shall
constitute “Cause.” Executive’s conduct need not
result in monetary or financial loss to constitute Cause. Executive
shall be permitted to attend a meeting of Employer’s
Board within 30 days after delivery to him/her of a Notice of
Termination (as defined below) pursuant to this Section 7(b)
to explain why he/she should not be terminated for Cause and, if
following any such explanation by Executive, Employer’s Board
determines that Employer does not have Cause to terminate
Executive’s employment, any such prior Notice of Termination
delivered to Executive shall thereupon be withdrawn and of no
further force or effect.
(c) Termination Without Cause
. A termination “Without Cause” shall mean
a termination of employment by Employer other than pursuant to
Section 7(a) or Section 7(b).
(d) Termination by Executive
. Executive may terminate his/her employment for any
reason. A termination of employment by Executive for
“Good Reason” shall mean a termination by
Executive of his/her employment with Employer within 30 days
following the occurrence, without Executive’s consent, of any
of the following events: ( i ) the assignment to
Executive of duties that represent a substantial diminution of
the duties that he/she is to assume on the date hereof, ( ii
) the failure of Employer to obtain the assumption of this
Agreement by any Successor (as defined below) to Employer as
contemplated by Section 14, ( iii ) a reduction in
the rate of Executive’s Base Salary, ( iv ) a
material breach by Employer of any of its obligations hereunder or
( v ) except in cases where Employer is promoting
Executive, the relocation of Executive’s primary office to a
location more than 50 miles from the location of Executive’s
primary office on the date hereof. Executive shall not be entitled
to terminate employment for Good Reason, in the case of any of
clauses (i), (iii), (iv) or (v), should Executive fail within
30 days following the occurrence of any of the events set
forth therein to deliver written notice to Employer of his/her
intention to terminate his/her employment for Good Reason, which
notice specifies in reasonable detail the circumstances claimed to
give rise to Executive’s right to terminate his/her
employment for Good Reason, and Employer or GPC, as the case may
be, shall not have cured such circumstances within a reasonable
time to the reasonable satisfaction of Executive.
(e) Notice of
Termination . Any termination by Employer pursuant to
Section 7(a), 7(b) or 7(c), or by Executive pursuant to
Section 7(d), shall be communicated by a written Notice
of Termination addressed to the other parties to this
Agreement. A ”Notice of Termination” shall
mean a notice stating that Executive’s employment with
Employer has been or will be terminated.
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(f) Payments and Benefits Upon
Termination by Employer Without Cause or by Executive for Good
Reason .
(i) In the event of
a termination of Executive’s employment by Employer
Without Cause or a termination by Executive of his/her
employment for Good Reason during the Employment Period, Employer
shall pay to Executive:
( A )
one year’s Base Salary,
and
( B )
the product of ( 1 ) the
amount of incentive compensation that would have been payable to
Executive for the calendar year in which the Date of Termination
(as defined below) occurs if Executive had remained employed for
the entire calendar year and assuming that all applicable
performance targets had been achi
